$14k net HHI - Budget Input

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP, you have a $280k income and are living like you have a $480k income.
Seriously, your lifestyle is exactly what I'd expect about $480k income would pay for.

We make $380k and max two 401ks and save some for college and have an investment property and we don't have half the luxuries that you do.


Your lifestyle WITH appropriate level of saving is close to a $480k one. No wonder you feel poor on your income.

Agree with this. The first luxury a high income should purchase is the luxury of maxing out your retirement and putting a good amount of money in investments. Memories of $325/month in manicures and hair dye will be cold comfort if one of you loses a job or gets injured and this lifestyle disappears.

They are literally paying everyone and for everything before they pay themselves. They should start by putting 2-3k in the market each month after maxing out retirement and THEN see what they have leftover for everything else.

It's ridiculous to not be investing money but to be paying a cleaning lady, yard man, private preschool, luxury cars, entertaining friends, takeout, etc.

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP, you have a $280k income and are living like you have a $480k income.
Seriously, your lifestyle is exactly what I'd expect about $480k income would pay for.

We make $380k and max two 401ks and save some for college and have an investment property and we don't have half the luxuries that you do.


Your lifestyle WITH appropriate level of saving is close to a $480k one. No wonder you feel poor on your income.

Agree with this. The first luxury a high income should purchase is the luxury of maxing out your retirement and putting a good amount of money in investments. Memories of $325/month in manicures and hair dye will be cold comfort if one of you loses a job or gets injured and this lifestyle disappears.

If OP is a trophy wife, then it's her job to look good. That means spending a fortune on personal grooming.

[Anonymous]

Yikes on your cars. You should have paid in full instead of financing, and bought used if possible. And your groceries, meals, and 'home supplies' amounts to $2150 a month, that is crazy! You can cut back here considerably.

Personal care can be cut to $100 a month. That's a lot to spend on activities for a young child.

Your meals and entertainment spending is high - these should saved for special occasions.

[Anonymous]

Anonymous wrote:Yikes on your cars. You should have paid in full instead of financing, and bought used if possible. And your groceries, meals, and 'home supplies' amounts to $2150 a month, that is crazy! You can cut back here considerably.

Personal care can be cut to $100 a month. That's a lot to spend on activities for a young child.

Your meals and entertainment spending is high - these should saved for special occasions.

I save a lot. Have a similar income and spend a lot on personal care. It's important to me. Here's the thing - you can't spend a lot on everything. You have to pick what you splurge on. On OP's salary you can't drive luxury cars, have a nanny, spend a lot on personal car, cleaning service, yard man etc AND save money. It isn't possible. OP simply has to cut some of these luxuries out if she wants to accumulate any wealth. Right now she is spending money on a thing and everything.

So while I spend a lot on hair cuts and color, we only have one car and it's paid off and we don't even use it to commute (use public transportation).

[Anonymous]

Anonymous wrote:Yikes on your cars. You should have paid in full instead of financing, and bought used if possible. And your groceries, meals, and 'home supplies' amounts to $2150 a month, that is crazy! You can cut back here considerably.

Personal care can be cut to $100 a month. That's a lot to spend on activities for a young child.

Your meals and entertainment spending is high - these should saved for special occasions.

Op doesn't understand about the cars. She doesn't recognize that on her salary you can't drive those kinds of cars and also save money. It's a choice. Instead of choosing to invest her money she has chosen to spend it on two luxury cars. On a monthly basis that extra $500-700 she is spending on luxury cars doesn't seem like a lot. But driving luxury cars over 10-20 years really adds up and will make a huge difference in accumulated wealth.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We are struggling to not overspend each month on a take home HHI of $14k per month (after retirement/taxes). I feel like (i know) this is ridiculous, so I'm looking for input from those with similar incomes on where we are spending more than average. And would also love to know how you cut back to spend less in those areas.

The way our average spending is coming in now we're in the hole about $600 more than we take in each month without savings (other than automatic to retirement), travel and any unexpected expenses. So something has to give. Obviously I know we could cut out things like the house cleaner that are optional. But I feel there must be other areas we're spending more than the norm we need to cut back on to get things under control.

Here is our average monthly spending by category - What looks out of whack to you with HHI of $14k per month?

Nanny/PT Preschool for one child - $3k per month
Mortgage - $3100 per month
HOA Fee - $200 per month
Investment Property - $750 per month (what rent doesn't cover)
Home Insurance - $125 per month
Car Payments - $1200 per month (2 cars)
Car Insurance - $110 per month (2 cars)
Gas - $200 per month
Tolls - $35 per month
Groceries - $1k per month, family of 3 plus nanny (weekdays breakfast & lunch for her). Includes wine/beer and hello fresh for weeknight meals
Restaurants/Take Out - $500 per month (normally one 'nice' date night dinner and the rest inexpensive)
Home Supplies - $650 per month (all the basics like toilet paper, paper towels, cat food/litter, shampoo, OTC meds, cosmetics, diapers, baby supplies, blah blah)
Student Loans - $350 per month
Personal Care - $350 per month (hair cuts/color, waxing, nails)
House Cleaner - $300 per month
Lawn Care - $135 per month
Shopping (Clothing/Accessories/Home Decor) - $500 per month
Gifts - $200 per month
Work Lunch - $150 per month
Entertaining - $200 per month (having guests over/parties)
Kid's Activities/Lessons - $200 per month (swim class, music class, outings)
Doctor/Dentist - $150 per month
Pharmacy/Medications - $100 per month
Water Bill - $100 ($300 every 3 months)
Gas Bill - $140 (in winter, much less in summer months)
Electric Bill - $200
Cell Phones - $200
Pets - $100 earmarked per month for vet visits, meds etc every few months
Entertainment - $150 per month (going out for drinks/movies/etc)
Cash - $200
TOTAL ~ $14,600

The investment property seems like an obvious thing to cut but Husband wants to keep the investment property as we should be able to refinance that and charge more rent to have that monthly cost go away in the very near future. And all of that $$ we're paying is going towards principal on the mortgage for that property, and it's in a great location in arlington so will hold/increase value.

New poster here. I don't think it's the car payments that are killing you guys, it's the rest of your discretionary spending.

The most ridiculous expenses you have are $650 on home supplies, $350 on personal care, $500 on clothes and home decor, $200 on activities for pre-school child, and $200 on gifts.
My husband and I make as much money as you, and we spend half on what you spend on the above you called out.

It's not an either or, it's both. Assuming it's a 3 years lease, and they had to put $3000 down for the Mercedes, they are spending more that $28,000 on a car and will have nothing to show for it in 3 years. If someone can afford that, great. OP clearly cannot. Either a leased car at 1/3 of the cost, or just buying a car outright for $30,000 and keeping it for 6 years would be a significant savings. But their friends all drive Mercedes, so clearly they have to as well. But, you are right that the car isn't the only problem.

Fair point about the lease. I guess my position is that most people NEED cars. $1200 in payments for 2 cars seemed okay to me. I had $550/monthly car payment on a ~$30K car, so $1200 seemed reasonable to me for 2 cars. It's true that you can get by with a much cheaper car, but 2 ~$30K cars aren't outrageous. Now, spending more than a car payment on "home supplies" (which includes makeup) per month - that's excessive. My husband and I go through paper towels and cleaning supplies like crazy, and even then, we spend about $50/month on such things. OP is likely lumping in Chanel makeup with "home supplies" which is why she's spending a ton of money.

If that is what OP and her husband drove, I don't think anyone would have batted an eye. But its not what they are driving, by a long shot.

[Anonymous]

OP, I am in a similar income bracket and have similar mortgage and childcare expenses. One thing that helps my marriage and my budget is that my husband and I both get a portion of each paycheck as personal spending money, and we combine the rest. This (around $500 per month) is what we use for lunches at work (if we eat out), plans with friends, haircuts, clothes, personal hobbies, etc...

Usually we use our combined funds for family gifts, wedding gifts, etc.. but if i want to send a friend flowers or contribute to someone's charity bike ride on a whim I do it with my personal money.

For me, it's easier to skip eating out or go a little longer between highlight appointments when i know I'm saving my personal money for a pair of shoes or something. Also if it's something frivolous for the house that's a want rather than a need, I'll often use personal money. Similarly, my husband buys lottery tickets and sometimes buys expensive sports tickets and I don't worry about it b/c it doesn't hit the family budget at all. This might help you guys cut down on the shopping and personal care budgets- because you are owning your choices within a certain budget...and you can choose expensive haircuts, or shoes, or lunches at work, but maybe not all three.

[Anonymous]

Anonymous wrote:OP, I am in a similar income bracket and have similar mortgage and childcare expenses. One thing that helps my marriage and my budget is that my husband and I both get a portion of each paycheck as personal spending money, and we combine the rest. This (around $500 per month) is what we use for lunches at work (if we eat out), plans with friends, haircuts, clothes, personal hobbies, etc...

Usually we use our combined funds for family gifts, wedding gifts, etc.. but if i want to send a friend flowers or contribute to someone's charity bike ride on a whim I do it with my personal money.

For me, it's easier to skip eating out or go a little longer between highlight appointments when i know I'm saving my personal money for a pair of shoes or something. Also if it's something frivolous for the house that's a want rather than a need, I'll often use personal money. Similarly, my husband buys lottery tickets and sometimes buys expensive sports tickets and I don't worry about it b/c it doesn't hit the family budget at all. This might help you guys cut down on the shopping and personal care budgets- because you are owning your choices within a certain budget...and you can choose expensive haircuts, or shoes, or lunches at work, but maybe not all three.

Yes! We do this too - we call it our allowances. I buy my clothes, most kids clothes, lunches, personal care, etc etc from my allowance money. Just bought two new pillows from TJ Maxx, so house stuff comes from it too. After picking up DS from practice, we decided to get inexpensive take out rather than drive home and eat leftovers - I bought it from my allowance (and after consideration, saved half because I decided I wasn't as hungry and could wait 30 minutes until we got home).

It's $300 per pay period for each of us.

[Anonymous]

LOL. OP is never coming back.

[Anonymous]

Anonymous wrote:LOL. OP is never coming back.

She was undoubtedly either raised by people with little money or people who didn't have a savings habit. I know because I am just like my parents - very disciplined in financial matters, not so much in terms of eating

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP, I am in a similar income bracket and have similar mortgage and childcare expenses. One thing that helps my marriage and my budget is that my husband and I both get a portion of each paycheck as personal spending money, and we combine the rest. This (around $500 per month) is what we use for lunches at work (if we eat out), plans with friends, haircuts, clothes, personal hobbies, etc...

Usually we use our combined funds for family gifts, wedding gifts, etc.. but if i want to send a friend flowers or contribute to someone's charity bike ride on a whim I do it with my personal money.

For me, it's easier to skip eating out or go a little longer between highlight appointments when i know I'm saving my personal money for a pair of shoes or something. Also if it's something frivolous for the house that's a want rather than a need, I'll often use personal money. Similarly, my husband buys lottery tickets and sometimes buys expensive sports tickets and I don't worry about it b/c it doesn't hit the family budget at all. This might help you guys cut down on the shopping and personal care budgets- because you are owning your choices within a certain budget...and you can choose expensive haircuts, or shoes, or lunches at work, but maybe not all three.

Yes! We do this too - we call it our allowances. I buy my clothes, most kids clothes, lunches, personal care, etc etc from my allowance money. Just bought two new pillows from TJ Maxx, so house stuff comes from it too. After picking up DS from practice, we decided to get inexpensive take out rather than drive home and eat leftovers - I bought it from my allowance (and after consideration, saved half because I decided I wasn't as hungry and could wait 30 minutes until we got home).

It's $300 per pay period for each of us.

Kids clothes and house stuff comes from _your_ allowance? Including takeout with your child? Whoa.

[Anonymous]

OP - come back in 6 months and tell us what changes you made.

[Anonymous]

Anonymous wrote:

Anonymous wrote:LOL. OP is never coming back.

She was undoubtedly either raised by people with little money or people who didn't have a savings habit. I know because I am just like my parents - very disciplined in financial matters, not so much in terms of eating

Same here I can stick to a budget but can't control my diet for the life of me.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The cars alone are clearly a problem. What's the story there?

+1. Geez that is a LOT to spend on cars. What kind are they?

Never mind, I read the rest of the post. I'd say things like the preschool and nanny are fine--if you have two working parents, full-time childcare is necessary.

Agree that the mortgate is good.

However, the cars! What is up with that? Why do you think you need two luxury cars? That's insane.

FWIW, we have a HHI of appox. $1.2M, and we have two Toyotas. Most of the families we know in our income have two cars, one of which is usually a minivan (Honda Odyssesy or Toyota Sienna) or a three-row SUV (Acuras MDX or Toyota Highlanders), and the other car may either be a luxury car (Audis seem to be popular) or a Prius or a Subaru station wagon. We have been sending our kids to private school for almost 10 years now (tuition is our biggest monthly expense), so I feel like I have observed a lot of families that have high incomes. About 20% are flashy (Mercedes SUV, LV bags, etc.), but the rest of us are not. I think that when you have a certain income, you are more interested in preserving it and are pretty practical (but not uncomfortably frugal) rather than interested in keeping up with the Joneses.

You make 1.2m, it doesn't matter at all if you go out tomorrow and drop 200k on a car. Plus, I sending your kids to private schools (which in this area is like 40k a year) is flashy. It is just DC style flashy.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The cars alone are clearly a problem. What's the story there?

+1. Geez that is a LOT to spend on cars. What kind are they?

Never mind, I read the rest of the post. I'd say things like the preschool and nanny are fine--if you have two working parents, full-time childcare is necessary.

Agree that the mortgate is good.

However, the cars! What is up with that? Why do you think you need two luxury cars? That's insane.

FWIW, we have a HHI of appox. $1.2M, and we have two Toyotas. Most of the families we know in our income have two cars, one of which is usually a minivan (Honda Odyssesy or Toyota Sienna) or a three-row SUV (Acuras MDX or Toyota Highlanders), and the other car may either be a luxury car (Audis seem to be popular) or a Prius or a Subaru station wagon. We have been sending our kids to private school for almost 10 years now (tuition is our biggest monthly expense), so I feel like I have observed a lot of families that have high incomes. About 20% are flashy (Mercedes SUV, LV bags, etc.), but the rest of us are not. I think that when you have a certain income, you are more interested in preserving it and are pretty practical (but not uncomfortably frugal) rather than interested in keeping up with the Joneses.

You make 1.2m, it doesn't matter at all if you go out tomorrow and drop 200k on a car. Plus, I sending your kids to private schools (which in this area is like 40k a year) is flashy. It is just DC style flashy.

But the point is that OP is wrong in thinking that she should be able to afford fancy cars because peer group seems to be driving Mercedes SUVs. PPs is explaining that if the families she knows with HHIs in the 7 figures are driving minivans, then OP is way off base in thinking that two luxury vehicles per household is somehow normal or expected.